Federal Bank Stocks Decline Amid the Top-Level Reorganization at Kotak Mahindra, the Question of Succession Plans
The impact on Federal Bank’s stock price is due to news from CNBC-TV18 indicating that the bank had considered KVS Manian for the role of Managing Director and Chief Executive Officer (MD & CEO). One of the most important steps in the succession planning process at the Kochi-based institution will likely be the submission of the selected names to the Reserve Bank of India (RBI).
Except in cases where they are bank promoters, a CEO’s tenure is limited to 15 years by the Reserve Bank of India. The current MD & CEO of Federal Bank, Shyam Srinivasan, took up the role in 2010, and his tenure is set to expire on September 22 of this year. According to RBI norms, Srinivasan might have continued for an additional year; however, the regulatory body denied the request for an extension.
The Kotak Mahindra Bank reorganization has created a sense of unpredictability in the Federal Bank’s succession planning procedure. The banking industry’s leadership landscape may have changed as a result of KVS Manian and Shanti Ekambaram’s abrupt promotions to higher positions within Kotak Mahindra.
The shares of Federal Bank, which are presently selling at Rs 155 a share, dropped 4.9% as a result of investors voicing their worries. It’s important to remember that the stock has risen by a significant 23% over the last 12 months, even with the recent setback.
